CONCESSION AS A STRATEGIC TOOL FOR PORTS EFFICIENCY: AN ASSESSMENT OF THE NIGERIAN PORTS

Background Of The Study: In today’s global commerce, seaports or maritime transport play an important role of being many nations’ major gateway for international trade and are a good instrument for measuring the economic health of a nation (Ogunsiji & Ogunsiji, 2010, UNCTAD, 2008). The ports have considerable influence on the volume and conditions of trade as well as the capacity for economic development of nations still developing. In Nigeria, greater percentage of international trade is routed through the sea, and given its huge population, it is believed that the Nigerian economy may account for about 70% of all seaborne trade in the West African sub-region (Fivestar Logistics, 2008). Hence, the country’s ports are increasingly challenged to meet the pressure mounted from movement of ships and cargo in and out of the ports. The Nigerian Ports Authority established as an autonomous public corporation with the enactment of the Ports Act of 1954, assumed responsibility as a regulator and an operator entirely owned by the federal government (Mohammed, 2008). The Technical Committee for Privatization and Commercialization (TCPC) was established in 1988 as a result of the need among others for a private sector driven port, and was charged with the responsibility of transforming NPA into a commercial organization. In 1992, the Nigerian Ports Authority was commercialized and it changed its name to the Nigerian Ports Plc. though the ownership remained that of government. Four years after, it reverted to its former name as a parastatal under the Federal Ministry of Transport. The reversion however, did not affect its commercialization efforts (NPA Brand Manual, 2005). With globalization, government realized it lacked the resources and managerial ability to drive a modern seaport successfully (Razak, 2005). Around the world, governments and port authorities have withdrawn from port operations knowing that enterprise-based port services and operations would allow for greater flexibility, efficiency, and better services to port consumers (Notteboom, 2007). This made the disengagement of government from the activities that could be more efficiently provided by the private sector inevitable. The process of involving greater private sector participation and expertise in the Nigerian seaports began in 2003 by the National Council on Privatization (NCP), the apex policy body on sector reforms in the country, in conjunction with the Bureau of Public Enterprises (BPE) (Razak, 2005). The Nigerian government initiated one of the most ambitious infrastructure concessioning programmes ever attempted in September 2004 (Leigland & Palsson, 2007). The programme gained global credibility with the involvement of the World Bank, CPCS Transcom of Canada and Royal Haskoning of Holland as project monitors, concession bid managers and consultants respectively (Fivestar Logistics, 2008). The Haskoning study as it is referred to identified some of the bottlenecks to the port operations and recommended the “landlord” model approach. By July 2006, twenty long term port concessions were awarded with some more in progress (Leigland & Palsson, 2007).